The Very Good Food Company, the parent company of Canadian plant-based meat producer The Very Good Butchers, (NASDAQ: VGFC) is undertaking a new profit strategy following the departures of CEO Mitchell Scott and co-founder James Davison.
In a statement, the company announced Scott was terminated while Davison resigned as Chief Research and Development Officer. The shakeup comes as Very Good faces considerable difficulty in turning a profit – the company has been unable to achieve profitability since its inception in 2016. On April 1 the company showed a dramatic loss of CAD54.6M (US$43.6M) in fiscal year 2021. The price of its Canadian shares has also dropped 80% in the past 12 months.
A new way forward
In an effort to correct course, Very Good now says it is pursuing a new path, which will see the company temporarily halting “non-critical” capital investments, decreasing production and cutting its staff. While the company searches for a new CEO, Very Good has formed a temporary Executive Committee that will serve to “review and approve key organizational, financial, operational and strategic decisions for the company” while supporting senior management.
On April 14, members of the executive team answered investor questions during an earnings call. When asked about the departed CEO’s compensation, Financial Controller Steven Hoang commented, “Neither Mitchell or James were fulfilling the service as of their termination and the departure from the company. Any unexpected or unexercised options will expire within 90 days of their departure.”
The company also revealed US wholesale growth as its top strategy for 2022. “Our focus is U.S. retail for 2022,” said Kevin Callaghan, VP of Sales – North America. “That is going to be where a lot of our resources are geared to. Very Good Food Company creates products that can fit multiple categories and have multiple uses. There’s a lot of value there.”
By the end of the call, Chief Commercial Officer Jordan Rogers sought to reassure anxious investors, stating: “We have a lot of work to do. And we’re excited to have everyone on this very good journey with us.”